Forex Flash: Decent risk QE4 size increase disappoints; USD bounce? - Westpac
FXstreet.com (Barcelona) - According to Sean Callow, Westpac FX strategist, while several factors will be impacting risk at the FOMC including Chairman Bernanke's press conference, "market interest will be firmly on the scale of the expected increase in QE."
Mr. Callow adds: "A Bloomberg survey found a clear majority of forecasters looking for a hefty $40-45bn of Treasury purchases i.e. QE jumps from $40bn per month to $80-85bn. If this is the outcome then doves such as Williams are the winners over centrists such as Bullard ($25bn), let alone the hawks (Lacker will dissent yet again)."
Sean sees "a notable loosening of monetary policy already priced in, which would be quite bearish for USD heading into 2013", however he still point at "a decent risk that QE is increased by a compromise total such as $30-35bn, which should produce at least a temporary USD bounce/ equity fall."
Mr. Callow adds: "A Bloomberg survey found a clear majority of forecasters looking for a hefty $40-45bn of Treasury purchases i.e. QE jumps from $40bn per month to $80-85bn. If this is the outcome then doves such as Williams are the winners over centrists such as Bullard ($25bn), let alone the hawks (Lacker will dissent yet again)."
Sean sees "a notable loosening of monetary policy already priced in, which would be quite bearish for USD heading into 2013", however he still point at "a decent risk that QE is increased by a compromise total such as $30-35bn, which should produce at least a temporary USD bounce/ equity fall."
Free Annual Reports
